Cheap gas and oil aren't the only forces disrupting the U.S. electric system. Solar is already wreaking havoc, and large-scale batteries are looming.
What Uber and Lyft have done to the taxi industry worldwide is just beginning to happen to the electricity industry; and it could shock consumers – particularly the less affluent – as surely as though they had stuck their finger in an electrical outlet.
The disruptive revolution is not only happening here, but also in Europe, as Marc Boillot, senior vice president at Electricite de France (EDF), the giant French utility, writes in a new book.
Ironically, here in the United States, disruption of the otherwise peaceful world of electric generation and sale last year was a bumper one for electric stocks because of their tradition of paying dividends at a time when bond yields were low. Related: Drought Forcing Brazil To Turn To Gas
The first wave of disruption to electric generation has been a technology as benign as solar power units on rooftops, much favored by governments and by environmentalists as a green source of electricity. For the utilities, these rooftop generators are a threat to the integrity of the electrical grid. To counter this, utilities would like to see the self-generators pay more for the upkeep of the grid and the convenience it affords them.
Think of the grid as a series of spider webs built around utility companies serving particular population centers, and joined to each other so they can share electricity, depending on need and price.
Enter the self-generating homeowner, who by law is entitled to sell excess production back to the grid, or to buy on the grid when it is very cold or the sun isn’t shining, as at night. The system of selling back to the electric company is known as net metering.
Good deal? Yes, for the homeowner who can afford to install a unit or lease one from one of a growing number of companies that provide that service. Lousy deal for the full-time electricity customer who rents or lives in an apartment building.
There’s the rub: Who pays the cost of maintaining the grid while the rooftop entrepreneur uses it at will? Short answer: everyone else.
In reality, the poor get socked. Take Avenue A with big houses at one end and apartments and tenements at the other. The big houses -- with their solar panels and owners' morally superior smiles -- are being subsidized by the apartments and tenements. They have to pay to keep the grid viable, while the free-standing house – it doesn’t have to be a mansion -- gets a subsidy.
It's a thorny issue, akin to the person who can't use Uber or Lyft because he doesn’t have a credit card or a smartphone, and has to hope that traditional taxi service will survive. Related: Utilities Facing Coal Shortages Due To Rail Congestion
The electric utilities, from the behemoths to the smallest municipal distributor, see the solution in an equity fee for the self-generating customer's right to come on and off the grid, and for an appreciable difference between his selling and buying price. Solar proponents say, not fair: Solve your own problems. We are generating clean electricity and our presence is a national asset.
EDF's Boillot sees the solution in the utilities’ own technological leap forward: the so-called smart grid. This is the computerization of the grid so that it is more finely managed, waste is eliminated, and pricing structures for homes reflect the exact cost at the time of service. His advice was eagerly sought when he was in Washington recently, promoting his book, entitled “Advanced Smart Grids.”
While today’s solar may be a problem for the utilities, tomorrow’s may be more so. Homeowners who can afford it may be able to get off the grid altogether by using the battery in an all-electric car to tide them over during the sunless hours.
The industry is not taking this lying down: It's talking to the big solar firms, the regulators and, yes, to Elon Musk, founder of electric-car maker Tesla Motors. He may be the threat and he may be the savior; those all-electric cars will need a lot of charging, and stations for that are cropping up. There’s a ray of sunshine for the utilities, but it's quite a way off. Meanwhile, the rooftop disruption is here and now.
By Llewellyn King for Oilprice.com
Source - http://www.whchronicle.com/
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Here is my message to the electric power companies:
Please build at least two Interstate Transmission Corridors from Pacific to Atlantic (3 timezones difference), to transmit:
1. Night energy;
2. Day energy from the ongoing solar revolution;
3. Wind energy from the wing corridor in the middle.
Accept a world with a backbone generation that is less than your generation now and distributed generation. Be the conductor of the distributed generation. Tell us how to point our solar panels through hourly time-of-day rate. Transmit the excess power instead of building new dirty power plants. At the current flat rate everybody would point solar panels south, but I know that the peak demand is in a summer afternoon.
You can charge us reasonable(!) fees on the distributed generation when it reaches a known in advance critical level. Right now my solar feeding back goes to the next door house and you sell it full price without having to transmit it from far away, which helps to reduce a peak load problem and completely cancels transmission losses, especially given that the losses a proportional to the current squired (Power loss=R*I*I, 10 times more current - 100 times more losses). The problem will come when half of the neighbors have solar panels, so you have to transmit to another city and to another time zone - then charge us reasonable fees, not punishable fees.
One neighbor was very direct to me about his way of thinking.
I told him that he could come to see our solar panels for electricity. He answered that he is not interested and at this price of the electricity he would not even consider changing windows.
If some people are thinking like this, take at least the subsidies off from coal. Let them pay the real price and let them their freedom to continue thinking like this.
The opponents to solar and distributed generation are silent about the advantage of giving power to the grid when the greed needs power the most - in a sunny summer day when every air conditioner is running. This is a symbiotic relation. The solar does not produce during the night when the grid has extra power anyway.
They are also silent about saving transmission losses by distributing the generation. The society wins as a whole, if you consider all sides as one total and disregard one side interests.
One has to look from all sides and balance the interests as a whole.
Disruptive technologies have always exist takes time to resolve into working system.
The automobile, train, powered ships, etc were all disruptive technologies at one time. Some of the difference here is structural. When the railroads "invaded" virgin territory, they did so by building their own network of rails - they didn't co-opt an existing rail system that someone else built. The same with Cellular - they built their own network.
The difference here is more akin to telephone systems. The disruptive electric technologies are trying to interface with a very complex infrastructure that already exists, was never designed for their use, has myriad problems of its own, etc. Much like early independent telephone providers, who were "renting" space on someone else's network.
Currently, rooftop solar is rarely installed in such a manner that it is totally self sufficient, and therefore it is using the grid, someone else's infrastructure, as a giant battery - feeding excess energy in when possible, and pulling from the grid at night and on cloudy days. Larger, ground based, projects are a bit more realistic, in that they only get paid when generating, and aren't consuming anything material at night.
Building cross country transmission systems is not an overnight happening. Permitting and local resistance takes years to overcome. Updating the grid to "mesh" with new technologies also takes years, and someone's going to have to pay for it all.